OPTIMIZE YOUR ELECTRICITY BILL BY ELIMINATING PENALTIES
We @Connectriq, help you understand your electricity bills and identify where you can act to reduce it.
We @Connectriq, help you understand your electricity bills and identify where you can act to reduce it.
Suppose you order a mug of cappuccino. You pay for a “full” mug of cappuccino, but instead, what you get is a mug partially filled with froth i.e., less coffee.
If the coffee in your mug is real power (i.e. kWh), full glass is total power (i.e. kVAh), and froth in the mug is reactive power (i.e. kVArh). Power factor is the proportion or percentage of mug filled with coffee, i.e. kWh/kVAh.
If the coffee in one full mug is 75% and 25% froth, your power factor is 0.75. Similarly, if you consume 1 kWh of power with 0.75 power factor, the energy that the utility has to supply is 1/0.75 = 1.33 kVAh. The 0.33 kVAh of energy is lost or froth in the coffee mug.
Thus, If the power factor is 1 or close to 1 then 1 kWh of electrical equipment would take 1 kWh of power from the utility. But, since it is drawing more energy from the utility there is penalty for it, which is called Power Factor Penalty.
Whenever you apply for a commercial electricity connection from an utility, you have to specify the maximum “demand“ (in kVA) that you need or Contract Demand (CD). During the month if you exceed your “Contract Demand” you have to pay penalty (or extra price) for the same. That is the CD penalty that appears on your electricity bills.
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